Summary of the dispute

The dispute between Gas Natural Fenosa, Moldova’s largest supplier and distributor of electricity, and the Government of Moldova arose from deviations between the costs of purchasing electricity and the regulated electricity tariff. Following the initiation of ICSID arbitration proceedings by Gas Natural Fenosa against Moldova, Deputy Director Dirk Buschle was appointed by both parties as facilitator of the negotiations in February 2015.  The negotiations took place in Chiṣinău.

The settlement agreement signed on 3 June 2016 between Gas Natural Fenosa and the Government of Moldova was the first step to bring to an end a months-long dispute. 

Following the signature of the settlement agreement, Deputy Director Dirk Buschle said: "On behalf of the Energy Community Secretariat and in my capacity as facilitator of the negotiations between Moldova and Gas Natural Fenosa, I highly welcome the agreement between both parties signed on Friday evening. The agreement will help stabilize a sector which suffers from a systemic vulnerability unmatched in Europe and has witnessed financial turbulences in the past few years. Not acting upon the resulting deviations in the electricity tariff would have led to protracted legal disputes and negatively affected Moldova’s reputation as an investment destination and a reliable partner for international organizations."

"I felicitate in particular the Government which had the courage to change the negative path of action and open the possibility for further reform and support. With today’s agreement, Moldova has shown that it takes its membership in the Energy Community seriously not only in the letter but also in its spirit. The ball is now with the regulatory authority ANRE to implement today’s agreement and with the international community to help ending the country’s dependence in its electricity and gas supply and infrastructure.”

The full implementation of the settlement agreement followed shortly in October 2016.  Fulfilling the terms of the settlement agreement, Gas Natural Fenosa reached amicable agreements with state power companies and the Moldovan energy regulator published a mechanism for the recovery of the tariff deficit.  The regulator will have to adopt increased tariffs as of 1 January 2017, so that the tariff deviations can be effectively recovered.

In a letter to the Secretariat, Jose Luis Gomez Pascual, President and Country Manager of Gas Natural Fenosa Moldova, thanked the Secretariat for “providing a common ground for the development of options to solve this major issue that threatened to put the electricity system of Moldova on the verge of extensive power outages.”